Company A has probability .01 of defaulting, company B has probability .005 of default- ing, if company A defaults the probability that company B defaults increases to .02. a) What is the probability that both company A and company B default? b) If company B defaults what is the probability that company A will default as well?

A First Course in Probability (10th Edition)
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ISBN:9780134753119
Author:Sheldon Ross
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Chapter1: Combinatorial Analysis
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Problem 1.1P: a. How many different 7-place license plates are possible if the first 2 places are for letters and...
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Company A has probability .01 of defaulting, company B has probability .005 of default-
ing, if company A defaults the probability that company B defaults increases to .02.
a) What is the probability that both company A and company B default?
b) If company B defaults what is the probability that company A will default as well?
Transcribed Image Text:Company A has probability .01 of defaulting, company B has probability .005 of default- ing, if company A defaults the probability that company B defaults increases to .02. a) What is the probability that both company A and company B default? b) If company B defaults what is the probability that company A will default as well?
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